It is better to be lucky than good.
With this massive upward movement, XLF spread is looking very good indeed.
We may have bad news still to come, but the feds have done a good job of masking the problems. Investors will go nuts buying into this for a few more days maybe even weeks. Stay on top of this.
Currencies also dropped against the dollar today, even with the rate cut. If you are not short the dollar, this could be a good time. Some times the logic of traders is missing. 3/4 rate cut and the dollar rallies. Go figure. This is why fundamentals are sometimes called funnymentals. This is where I bow out of the technical fundamental argument. But then I don't know many that called this from the technical side either.
4 comments:
Dell,
I legged into the xlf spread; buying it at a low and selling it high...pulled in 61% on the front month! This beats our 33% goal.
Thanks.
My question is regarding closing out bull put spreads on the day of expiration; I've been told to close an rut spread prior to expiration because settlment is dependant on the next day open.
Is this same logic true with individual stocks; ie I have spreads on pcu and isrg..should I just let the bull put expire?Mike
what is your opinion re gold?
any recent naked put candidates? f? do you need to have the whole downside in the account or just 20%
Spreads are unwound on the next trading day. Remember most of them expire on the 3rd saturday. The 3rd friday is the last time they can be traded. So assignment can happen when the market is not open.
Now if it is a spread the broker just closes both sides. This occurs on the next trading day for both sides.
On the Gold question, it is going to hit 2,300 the only question is when. Now this will be a very bumpy ride. If you area n astute trader (which I am not) you can catch each of these violent swings, otherwise buy and hold gold. My favorite way is LEAPS tehn sell the short month.
The put question is a good one. You do not need the entire amount in the account, however I would be lacking in good judgement to tell you to do this. I maintain and have maintained that you should never trade options uncovered or unsecured. Lived through too many '87 scenarios. YOu never know when something that possibly cant happen does. See Bear Stearns for example.
If you want some good candidates, stick around. Many fiancials will be in this category soon enough.
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